With tougher lending standards in place, borrowers need to be more proactive and prepared. While finance for your new home may be a little harder to secure, don’t despair. Here are some tips to help you on the path to an approval:
Demonstrating your stability
Lenders are implementing tougher requirements when it comes to lending, and this means they care a whole lot more about your “character”. Most lenders want to see you are stable. It helps to show steady and consistent employment history, demonstrate a regular savings pattern or solid repayment history. Stability gives lenders confidence you will repay a loan.
Reducing your commitments
Boost your borrowing capacity by eliminating other debts and liabilities. Pay off any loans, reduce your credit card limits and cancel those you are not using. If you have a high portion of unpaid debts, consolidating may help reduce your total commitment. Remember the more commitments that you have, the lesser the home loan repayment you can afford.
Cleaning up your credit
Before applying for your home loan, make sure you are creditworthy and obtain a copy of your personal credit file (free at http://www.mycreditfile.com.
Set realistic expectations
Don’t seek a loan size you cannot service. It’s important to conduct a self-assessment of your financial position. This is to ascertain the amount you can borrow and the ease with which you’ll be able to manage repayments. Your home loan repayments should be no more than a third of your income. Even when seeking a loan within your means still be prepared for knockbacks, some lenders have very selective criteria.
Give me a call
If your considering getting a loan I can help assess your position and borrowing capacity, provide advice on the most appropriate lenders and loans to suit your needs, package your application to increase your approval prospects and guide you through the whole process. As always my services are free and I love to help in any way that I can. 0401 796 425.
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